On Tuesday, Reuters said that Egypt’s negotiations with the International Monetary Fund to obtain a new loan have finally reached a very advanced stage.
The fund’s managing director, Kristalina Georgieva, expected the two parties to reach an expert-level agreement very soon. Refinitiv, an American-British global provider of financial market data and infrastructure, had said that the Egyptian pound is approaching a historically low level.
Goldman Sachs had said about two weeks ago that Egyptian officials estimated the dollar exchange rate at 22-24 pounds, adding that they expected the IMF loan to be between three and five billion dollars, much less than the bank’s estimates of the financing gap in Egypt, which amounts to 15 billion dollars during the next three years. The French BNP Paribas also issued a memorandum announcing the reduction of its expectations for the size of the IMF loan that Egypt seeks to obtain. According to the memo, the IMF is negotiating with Egypt about a third of the expected value of the loan, between three and five billion dollars. It added that Egypt needs $26.2 billion in external financing in the fiscal year to repay debts and cover the current account deficit.